ManagementJute mills' body seeks to reinvent self as member breaks ranks
Nearly a decade and a half ago, a leading south-India based group with four sugar factories resigned the membership of Indian Sugar Mills Association (ISMA) leaving the industry then guessing about the compulsion of the move. What, however, was of some comfort for ISMA was that the group gave a commitment that it would neither work at cross purposes with the association nor would it ever say anything critical about it.
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The suspicion still remains that the group, sure about its presence in the corridors of power, thought it could get the problems coming in its way in the course of doing business, resolved independent of ISMA. What, however, came as a big disappointment for ISMA is the quitting of by far the biggest Indian sugar group Bajaj Hindustan soon after Kushagra Nayan Bajaj took charge.
Why Bajaj Hindusthan with 14 mills having a capacity to crush nearly 140,000 tonnes- a-day, facilities to make 218 million tonnes of ethanol and produce 397 Mw of electricity, decided to walk it alone, independent of ISMA is well recorded. But it speaks of the group’s strength that the government in Delhi or in Uttar Pradesh will hold consultation with Bajaj Hindusthan before a policy decision is taken.
ISMA is not the only association representing an agro-based industry to be bedevilled by the breaking of ranks from time to time. Now as the unions have served notice that jute mills, which are mostly found in West Bengal, will be facing an indefinite strike from December 14, news comes that Ludlow Jute owned by former Ficci president S S Kanoria has quit Indian Jute Mills Association (IJMA).
Why has Ludlow, the country’s only jute mill to have been built by the Americans, chosen this time to break away from IJMA? We learn that Ludlow being committed to rapid reforms of raw jute farming and mill processing of fibre, was getting increasingly frustrated by the slow pace reportedly set by the Association. What, according to informed sources, proved the proverbial last straw on camel’s back triggering Ludlow resignation is IJMA’s lack of resolve to see that the strike does not happen.
The strike issue beside, what caused a great degree of annoyance to Ludlow and must be to a few other mills was that the industry was getting nowhere to the goal of producing lighter bags for packing foodgrain. IJMA, according to them, has put itself on the wrong track in this regard. Ludlow does not agree that light weight hessian bags for foodgrains packing will work since these are not to withstand the impact of multiple hooking at various stages of use.
Ludlow instead expected IJMA to pursue with Bureau of Indian Standards and other government agencies the introduction of light weight 560 gm DW bags in place of 665 gm B Twill bags. Kanoria’s thesis is while the growers should be attractively compensated for his efforts, the burden of higher prices for raw jute should not be passed, albeit entirely to consumers of jute bags. Cost mitigation will happen automatically in the course of making lighter bags.
That the government others buy jute bags on cost plus basis is no reason why they should not be given the benefit of lighter material. According to Kanoria, had lighter bags been produced and used, then that would lead to a saving of 7-8 lakh bales of raw jute of 180 kg each this season and in the process easing supply crunch.
Jute’s strength is in its environment friendliness and bio-degradability. The natural fibre’s appeal will be further enhanced, particularly in overseas markets provided the industry starts making hydrocarbon free jute bags for packing coffee and cocoa. But here also the industry has little to show.
But whatever the provocation, a member, particularly with a large business profile leaving an association does not do the industry any good. It is in this context IJMA is contemplating making a representation to New Delhi that for any jute mill to get orders for B Twill bags from DGS&D – government orders take care for over 40 per cent of the industry’s production – it first needs to be a member of the Association. IJMA also desires to be the ratifying agency for mill modernisation without which government subvention will not be available.
No doubt, IJMA is now trying to reinvent itself on the lines of ISMA by infusing young blood in its committees and secretariat. According to Om Dhanuka, a former ISMA president, agro-industry associations will prosper provided no constituent, however mighty it may be, will think of having an agenda independent of the representative industry association. Unfortunately, there could sometimes be overwhelming compulsions to quit.